COMMISSIONER OF SALES TAX Vs. ESSO STANDARD REFINING CO OF INDIA LTD
LAWS(MPH)-1980-2-25
HIGH COURT OF MADHYA PRADESH
Decided on February 04,1980

COMMISSIONER OF SALES TAX Appellant
VERSUS
ESSO STANDARD REFINING CO.OF INDIA LTD. Respondents


Referred Judgements :-

G I T ANDHRA PRADESH VS. TAJ MAHAL HOTEL SECUNDERABAD [REFERRED TO]


JUDGEMENT

- (1.)BY this reference under Section 44 of the M. P. General Sales Tax Act, 1958, hereinafter called the Act, the Board of Revenue has referred the following question of law to this Court for its opinion :
Whether Esso solvents Nos. 1425, 3040 and 2445 are exigible to tax under entry No. 39 of Part II of Schedule II or under the provisions of the M. P. Sales of Motor Spirits Taxation Act, 1957 ?

(2.)THE material facts, as set out in the statement of case, are as follows :
The assessee-company is engaged in the business of sale and distribution of petrol and petroleum products. The assessee was assessed to sales tax for the period from 26th December, 1963, to 25th December, 1964, by order dated 28th March, 1968, by the Assistant Sales Tax Commissioner. By this order, the turnover arising out of the sale of Esso solvents Nos. 1425, 2445 and 3040 was taxed under entry No. 39 of Part II of Schedule II to the Act, which provided for taxation of all kinds of petroleum products and mineral oils including kerosene oil except those that are liable to tax under the M. P. Sales of Motor Spirits Taxation Act, 1957, hereinafter called the Motor Spirits Act. This order was revised by the Additional Commissioner of Sales Tax under Section 39 (2) of the Act on the ground that the three categories of solvents sold by the assessee were not exigible to tax under the Act but were so exigible under the Motor Spirits Act. Aggrieved by that order, the assessee filed an appeal before the Board of Revenue and, by an order dated 9th April, 1973, the Board held that the solvents in question were neither motor spirits nor petroleum and were properly taxed under entry No. 39 by the Assistant Commissioner of Sales Tax. In this view of the matter, the Board set aside the order passed by the Additional Commissioner. At the instance of the Commissioner, the aforesaid question of law has been referred to this Court.

(3.)AT the outset, it would be useful to refer to the relevant provisions of law. Entry No. 39 of Part II, Schedule II, to the Act, which was in force at the relevant time, reads as under :
39. All kinds of petroleum products and mineral oils including kerosene oil except those which are liable to tax under the Madhya Pradesh Sales of Motor Spirit and Lubricants Taxation Act, 1957. Under the Taxation Act, 1957, i. e. , the Motor Spirits Act, tax is levied on "motor spirit" as defined by Section 2 (h) of the Motor Spirits Act. That definition is as follows: 'motor spirit' means any substance which by itself or in admixture with other substances is ordinarily used directly or indirectly to provide reasonable efficient fuel for automative or stationary internal combustion engines and includes petrol, diesel oil and other internal combustion oils but does not include kerosene, furnace oil, coal or charcoal.
The definition of "petrol" is to be found in Section 2 (i) of the Motor Spirits Act and it is as under : 'petrol' means dangerous petroleum as defined in the Petroleum Act, 1934 (30 of 1934); and includes admixture of power alcohol as defined in the Indian Alcohol Act, 1948 (Central Act 22 of 1948), and petrol. The provisions of Section 2 (a) and (b) of the Petroleum Act, 1934, which were in force at the material time, are as under :
2. In this Act, unless there is anything repugnant in the subject or context, (a) 'petroleum' means any liquid hydrocarbon or mixture of hydrocarbons, and any inflammable mixture (liquid, viscous or solid) containing any liquid hydrocarbon ; (b) 'dangerous petroleum' means petroleum having its flashing point below seventysix degree Fahrenheit. It is in the light of the aforesaid provisions that we have to ascertain whether Esso solvents Nos. 1425, 3040 and 2445 are exigible to tax under entry No. 39 of Part II, Schedule II, to the Act or under the provisions of the Motor Spirits Act.



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